News, views and analysis of Tecnon OrbiChem experts

UP Resins: Margins returning to normal as raw materials stabilise

After a difficult first quarter normality is starting to return to the UPR markets. The first quarter saw some sweeping price increases for a number of raw materials and producer margins came under pressure. This was despite volumes and sales figures being reported at ‘better than expected’ levels. Raw material prices increased month on month at the start of 2017 and this led to UPR producers having to push through significant consecutive price increases of their own in order to improve profitability and keep up with raw material costs.

At the end of March and into April is when the market started to see the light at the end of the tunnel. April saw huge declines for styrene as benzene moved lower and product availability improved. However, it wasn’t all good news as prices for other key feedstocks such as isophthalic acid, phthalic anhydride and maleic anhydride continued to increase. The drop in the styrene price, especially in Europe, was negated by these other increases and overall feedstock costs remained inline with the previous month. UPR prices in April were stable in both the US and Europe, many negotiations were concluded with rollovers, as the roller-coaster the market had been on in the first quarter looked to be coming to an end.

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